SBP’s reserves came down to $4.2 billion. Foreign exchange reserves of the State Bank of Pakistan (SBP) fell to $4.2 billion as the cash-strapped country failed to secure external financing despite efforts to restart the stalled bailout programme.
In its bulletin, the SBP said its reserves declined by $119 million for the week ended May 19, and currently stand at $4.19 billion, Arif Habib Ltd said the reserves cover less than a month’s imports will provide.
Net foreign reserves held by commercial banks at $5.53 billion, $1.34 billion more than the central bank, taking the total liquid foreign exchange reserves to $9.7 billion.
This is the fourth weekly decline in foreign exchange reserves, with Pakistan showing no signs of securing external financing any time soon amid political instability – which has had a huge impact on the deteriorating economy.
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The $350 billion economy is in turmoil amid a financial crisis and delays in striking a deal with the International Monetary Fund (IMF) that would release much-needed funds to avert the risk of default.
The government has been in talks since late January with the Washington-based lender to restart a $1.1 billion loan tranche that has been stalled since November, part of the $6.5 billion Extended Fund Facility (EFF), on It was agreed upon in 2019.
A deal with the IMF would also open up other bilateral and multilateral financing avenues for Pakistan to shore up its foreign exchange reserves.
The ninth review was to be held in November 2022 but the two sides are yet to reach a consensus.
The IMF has been insisting that the government needs to secure “significantly higher financing” for a successful bailout review, but local officials are adamant that they have already met the requirements.
Federal Finance and Revenue Minister Ishaq Dar said on Wednesday that all technical formalities and pre-emptive actions had been completed, but unfortunately, the IMF program was facing a structural delay.
Dar expressed confidence that Pakistan will not lapse and the coalition government is determined to complete the 9th review of the IMF programme.